By Victor Ahiuma-Young

It is an understatement to say the year 2024 was  difficult for most Nigerians and businesses. It was indeed a year even the fittest will not forget in a hurry. 

In this interview with the Director- General of the Nigeria Employers Consultative Association, NECA, and Voice of Business in Nigeria, Adewale-Smatt Oyerinde, he speaks on diverse issues affecting businesses and how the government can turn the nation’s economy around this year.

Outgone year

Well, the outgone year, I must say, was very challenging. It brought out the real resilience of an average business owner. It taxed us within the context of innovation because really, for you to survive, you must have imbibed a high level of innovation in the context of what you are doing. We are just hoping that the government will do well to deal with all the issues, all the challenges of 2024, this new year. Let the Port Harcourt refinery come on board fully. And ordinarily, Nigerians should have some level of competitive advantage in the price of fuel that is being sold or that will be sold at the public refineries. Let government do whatever is needed to address the supply side of forex, and block the leakages. 

That is the point where we start seeing the critical effects in the exchange rates. Let government do whatever is needed, because we cannot really run away from supporting the critical sector. We cannot run away from supporting organised business because if we are to address the critical issues of unemployment and insecurity, then we must empower those institutions or businesses that are to create employment. 

Let regulators, key performance indicators be how many businesses you are able to support. Are you able to support them to increase their production capacity from X per cent to Y per cent? Not how many businesses you are able to penalise, or how much revenue you are able to make from penalties slammed on organised businesses.

For us, it is contradictory. If you want to grow, then you support those that need to grow. You support them to grow. So it has been a very challenging 2024, but we want to commend organised businesses for their resilience, doggedness and staying power in making sure they continue to support the Nigerian state for us to achieve our bigger objectives. For businesses that have left, it is unfortunate, it is quite disheartening, and we just hope that as the economy continues to navigate its path towards sustained and inclusive growth, those businesses that have left will find it necessary to come back to the country to continue their businesses.

Agenda for govt in 2025

One of the things government needs to do is first to take a second look at the whole context of ease of doing business. Let ease of doing business be defined from the context of the business, not from the context of government or the regulator. Let the government create an avenue where businesses can share with them their definition of ease of doing business. That is when we start addressing the issues from the perspective of the businesses because they are running it. I want to commend the Minister of Industry and Investments and the Minister of State  for Industry and Investments for the engagement they have had with the private sector. I also want to commend the Minister of Labour and Employment and Minister of State for Labour and Employment for the engagements they have had. But I believe that engagement can cut across. 

While those agreements are ongoing, it is very important that they rein in regulators that have constituted themselves into business undertakers, which is one of the things that we will be taking to the plate of government in 2025. Lastly, legislative issues. When the National Assembly keeps coming up with bills that stifle businesses rather than facilitate a good environment for organised businesses to operate, business es can hardly compete.

Like the bill that states you must pay 0.5 per cent of profit after tax or gross profits. There are over 10 similar bills that are still in the National Assembly. They have one component of payment by  organised businesses or the other. Those are the critical issues that we want government to look at. It is better to be inconsistent than to persist in error. Whenever government feels that a policy is not working, it should not be shy to do a bit of tweaking.

They should call stakeholders together to review each of the policies. Let us look at which of the reforms is not working, and which is working. Let us tweak it so that we can achieve the bigger objective of national growth and enterprise sustainability.

Challenges of business 

One of the issues we think we need to deal with  quickly is the use of regulation. In the regulatory space currently, there are many overlaps which are creating serious problems for organised businesses. We have the Federal Competition and Consumer Protection Commission, FCCPC, that is becoming too overbearing in the context of its operations. While we thought it was s only the private sector, the Minister of Aviation and Aeronautical Development also raised an issue concerning FCCPC, concerning its recent careless comment , as it was called. If somebody in government can say that, then you can imagine the challenge that the private sector faces. There are overlaps between FCCPC ‘s role and that of the SON or NAFDAC.

So regulation is one big challenge. The Presidential Enabling Business Environment Council, PEBEC, did a lot in facilitating the creation of the PEBEC Forum that was inaugurated by the Vice-President. But we think more needs to be done to rein in regulators that are becoming terrorists or regulators that are becoming critical undertakers for many organisations. This is an issue we want government to resolve quickly. The second is legislative issues. The legislators  have continued to come up with different kinds of bills, aimed at putting more burden on organised businesses. You have to pay 1 per cent of this to this. You have to pay 0.5 per cent of this to this.

All those costs, where exactly do we put them? In a season where  businesses are already overburdened with different taxes, levies and fees; in a season where businesses are leaving this country and people seem not to be concerned; in a season where we keep complaining about unemployment but we are not promoting those that are meant to generate employment. Those are the critical issues that we have. We want government to address them quickly. 

Then the issue of ease of doing business in this whole context is also a big challenge that we also want government to deal with. Forex remains a big challenge and the need to also support local manufacturing. Sometimes we discuss a lot about trade, export, The African Continental Free Trade Area, AFCFTA; and for us, you cannot really play well in the AFCFTA if your local manufacturing is not strong. Because the goods that you will produce in Nigeria most likely, will be more expensive than the goods that they are bringing from overseas.

Within the context of subsidy or no subsidy, it becomes even much more difficult for you to compete as a Nigerian business, with goods from other countries where their government is subsidising electricity or  subsidising one thing or the other to make sure that the businesses can produce and remain competitive. In AFCFTA, we are disadvantaged because our capacity to produce competitively is compromised by inherent contradictions that we have in the system.

Closures, job losses 

This is like asking a father that has lost some children to list how many children he has lost. It is a disheartening scenario. 

If a business closes down, let us say when GlaxoSmithKline, GSK left, it had over 1,000 direct employees and many indirect employees. That is businesses that were supplying GSK. Once GSK left Nigeria, we incapacitated 1,000 able-bodied Nigerians from their ability to generate income. We have incapacitated school owners, the ability to collect school fees from those 1,000 people because most of those 1,000 are probably parents. We have incapacitated the landlords of those 1,000 individuals from the ability to collect rents. We have incapacitated the woman selling tomatoes because if you do not have disposable income, you probably will not patronise those people.

The consequential effects, now look at 50 companies with 1,000 staff each making 50,000 individuals. You can now contextualise the effects of their economic states because they can’t patronise businesses. Disposable income for them is zero. Then they will feel the effects, first line. But every other person that they are servicing, will also have consequential effects. It is a massive challenge. Unemployment and insecurity that we see now, are the consequences. 

At the last count in the manufacturing sector, we reported over N200 billion unsold stock. It is also a consequence of the inability of the consumers to purchase. If they don’t purchase those stocks, they will expire and if those stocks expire, then the business cannot sell. What is the fate of such businesses that have collected loans? That is the main reason why we need to address all these contradictions. 

Let us say BOI, (the Bank of Industry) just gave some loans to some SMEs. Those SMEs unfortunately are located in the band A area. It unfortunately has to pay all these taxes, levies and fees. How will that business survive? We would have supported from the frontline with a loan, a low interest loan, or even a grant. But the business is facing principalities and powers. Some of them call themselves regulators that are positioned to stifle that business so that it doesn’t survive, or fulfill its potential. Those are the critical issues.

Influx of substandard products

What determines or influences a buyer everything being equal, is quality and price. But when everything is not equal, there are parallels. When everything is not equal again, what influences the purchasing of the middle class, of the lower and middle class is price. At that point, you cannot go for quality because quality will be directly proportional to cost. Because your disposable income is now less, you look for the closest substitute. What will influence your purchase will be price. That is the dynamics of what we currently face. Because the disposable income of an average Nigerian is low, it is secondary whether the goods is substandard or not, provided it can provide some shade of the quality. 

That is why substandard goods are thriving because those goods come from abroad, they are not experiencing the kind of strangulation that an average manufacturing factory is struggling with here. They produce cheaper and Nigerian businesses are not able to compete within the context of the pricing.

We are looking at this from pharmaceutical perspective. You are seeing fake drugs everywhere; a health risk. Even if you have the money, you cannot find genuine drugs to buy. So how do we address this? 

It is quite unfortunate that we have various evil-minded people involved in this context of selling substandard drugs. That is direct murder, if you want to call it right. It is quite unfortunate. NAFDAC, even with its own limitations, has done quite a bit in playing its role in that field. But a lot more has to be done to deal with it. I wouldn’t know if NAFDAC has an intelligence unit. If they have, there is a need for that unit to be strengthened so that we can continue to address these issues.

Nigerians too also have to play their parts within the context of providing intelligence, critical intelligence to security agencies so that they can apprehend those producing or selling fake products. It is not only affecting the health of the individuals, it is also killing the business. If substandard products are being sold at prices cheaper than what ordinarily should be the cost of production, then it creates a different dynamic for legitimate businesses to survive in this economy. 

We will throw it back to the regulators. They have to play their role. They have to regulate the environment, which is their critical assignment. Rather than pursuing revenue, their critical assignment is to regulate the environment. Make sure things are done the way they should be done. But most of them are focusing on penalties, which is a challenge that we currently have. They are deviating from regulating, moving to the real realm of revenue generation, which changes the whole context of operations.

Minimum wage

Most private sector organisations, even before we agreed on N70,000, were paying above N70,000. The minorities , the critical minority that were not paying up to N70,000 have done the needful after the law was passed to up the minimum wage to be in alignment with the law. 

Before we started the negotiation of minimum wage, the private sector had taken the bull by the horn to continue to support their staff. We know businesses that double the salary even before we started negotiating the minimum wage. We know businesses that started the hybrid kind of work, work three days in the office, work two days at home so that you can reduce the cost of transportation and reduce so many other costs associated with transportation, feeding and rest. 

“So for the private sector, it is a challenge because you really need to create an environment intrinsically to keep your staff motivated. You also need to create an environment that also supports them at the external level because an employee that is not happy at home hardly will come to work happy and hardly will you get the best from such employees. 

“It has been a challenge for the private sector. The private sector has been able to come up with different innovations, different modes, different models, different mechanisms just to keep employees motivated, notwithstanding the squeeze that we are currently facing from the economy as it were.

Erosion of minimum wage value 

The cost of electricity went up after the minimum wage was discussed. The cost of transportation still remains challenging, notwithstanding the advent of Compressed Natural Gas, CNG, buses. The challenges have not really gone, they still remain. So the expectation is that the reform will start bearing positive  fruits.

The money  from subsidy removal should be ploughed back into public infrastructure. Let the roads be motorable . Let there be an effective and efficient public transport system so that people do not have to take their cars if they don’t want to. They can enter an efficient public bus or train. Let the money be ploughed back into security so that we can provide security inthe hinterland so that the farmers can go to their farms, produce and harvest.

The more the farmers can harvest, the more they can take their goods to the market. The natural consequence is that the price of goods and services will come down. So if we address the wage goods ie food, transportation and shelter, those three critical issues, transportation through an effective mass transportation system, food and food security by creating an environment where farmers can plant, harvest, then shelter for individuals, you have significantly resolved the core challenges that an average person faces. 

The minimum wage of N70,000 has actually been eroded by the current realities. But it is not a two plus two equals  four argument. It is an engagement that stakeholders must not shy away from. We must continue to engage and we must continue to be innovative within the context of our engagement so that businesses will prosper, the workers will prosper and the nation eventually will prosper.

Floating of Naira

Before Naira was floated, we had two markets. Not floating the Naira is hard. Floating it is also hard. At every point in time, you must pick your hard. You hard, to a large extent, also naturally will not be my hard. When Naira was not floated, if I had good friends in the bank, I could go to the bank and buy Dollars for N400 or N500 per dollar. Then I cross to the next street and sell it to the bureau de change for N1,000. In one hour, I will become a millionaire or a multi-billionaire. Round-tripping was predominantly what was happening when the Naira was not floated. 

While the floating has not really resolved the problem, a step has been taken. We believe strongly that the Naira was floated without taking care of the fundamentals that will help it. The whole principle of the market economy is driven by demand and supply. My  economics 101 says if demand is higher than supply, that means there is some level of scarcity, then the price will go up. If supply is higher than demand, naturally the price will come down because many goods are chasing few naira. 

Our sources of forex were not addressed. The refinery was struggling at just over one million barrels per day. Crude is our core source of forex . Our supply channel was constrained. Even when we floated, the supply was not meeting demand. There was nothing anybody could have done. Once supply is not meeting demand, many naira would be chasing very little dollars and naturally pushing up price. What we would have done, was to address the flow, the supply side of the dollars. One of the critical ways we would have addressed it was the issue of local refineries. The quantum of money that we used to import fuel was humongous. The government found itself in situation where you have to take action because if you don’t do it, the worst thing is not doing anything. The second worst thing is leaving it the way it was. Many people were making millions out of the average Nigerian.

Clamour for govt revoke  power sector privatisation. 

You cannot go one step forward and then two steps backward. Government has proven not to be able to manage anything significantly. Can we name three businesses that government has managed successfully in this country? Hardly can you name one. The biggest ones that are working have a very deep private sector influence. The Nigerian Liquified Natural Gas, NLNG, has a very deep private sector influence. The Nigerian Railway Corporation that is currently working, we hear that the debt is bigger than what they are making.

No functional privatised assets 

I think we should put it in a good context. Privatisation itself is not a problem. The process of privatisation is what we should look at. We can’t cannibalise privatization because every business that is created basically is aimed at making profit. That is the basics. You are actually risking your investment. If you are borrowing money, or 

collecting loan or credit from the bank, you are also risking something to put it down. Profit is the reward for risk. So we should not run away from the context of profits or cannibalise those businesses that are profit-driven. We are not a socialist economy. 

The process of privatising those businesses are the issues. Worst-case scenario, if privatisation becomes a challenge for us, then let us take those businesses to the stock exchange and sell it to Nigerians. Let government own 30 percent of the shares and Nigerians own another 29 percent making 49 percent. Sell the remaining 51 percent to private individuals that will inject in money to revitalise those businesses. The biggest example we have is the telecoms. Telecom is working. We have been on the issue of Nigeria’s four refineries for over 30 years. An individual, a private sector driven individual, built a refinery in three or four years. Probably the biggest in Africa. 

On the power sector, we think the challenge is that the owners, beyond the process, it is highly probable that the evaluation of the assets of NEPA was not well done. The people that bought it, bought it in anticipation that NEPA it was a cash cow. They got into the system and realised that they basically bought carcass of a business. The generating plants, the generation network, was almost non-existent. The distribution was almost non-existent. The reality of what they have bought dawned on them. 

If government takes it back,  it will provide the money. Where is the money to fund those DISCOs to bring them back to where they should be? To fund the 2025 budget, government is borrowing trillions of Naira. So where is the money to revitalise these DISCOs? 

Owners without knowledge 

If that is the issue, it comes back to the government that supervised the process . Look at what happened during the Telcos. Bidding was done, you must have a partner, you must have this process in place. And the bidding was transparently done.

It is the government that should protect the process of the privatization. If government messed it up, then you cannot naturally blame the private sector. Government is the regulator, we have the Nigeria Electricity  Regulatory Commission, NERC, that is also created to regulate that industry. Let the regulator play its role, let government play its role and let Nigerians play their role. Even as of today, the level of theft that is going on as we speak is also humongous. Nigerians stealing transformers, Nigerians stealing cables, Nigerians doing illegal connections.

Do we put that at the door of the DISCOs? Do we know the challenge they face also within the context of people using power without payment? It is a wide conspiracy of everybody involved, the consumer, the operator, the regulator and government itself. There are also issues of government agencies, the military barracks, owing the DISCOs billions of Naira in unpaid income, unpaid revenue. Who do we blame for that? Everybody has their share of blame in the context of what is happening in the discourse. 

What should be done 

The regulator has to play its role effectively. That is just the truth.  The DISCOs are operating within an ecosystem, an ecosystem that is guided by regulation. It is for the regulator to play its role and effectively.  Also, the judicial system should also play its role effectively. When a consumer is aggrieved and takes his case to court, let justice be dispensed as quickly as possible. The customer that is not getting light, moved to band A.

As a customer, you should have definitive hours of light for you to stay in band A. And if you don’t have that quantum of light for a period of time, you are supposed to be moved  back to band B or band C. Is the customer reporting those breaches or those issues? If I am not getting light for 22 hours or 21 hours or 20 hours, am I reporting? If I do not report, I am a co-conspirator in the whole issue.

Deaf ears 

If you report nothing is done, then did you report appropriately? If you report nothing is done, have you followed the channel as enumerated by NERC for my reporting? Then why can’t you explore the option of going to the court to seek for relief? So we are all just caught up in this attitude of they will not do anything or nothing will come out of it. By following that attitude of nothing will come out of it, what we are doing is, we are empowering those companies to continue in that pattern. We are all co-conspirators. We have our issues with the band context, band A or band B. One of the challenges of businesses currently is increase in cost, general cost, increasing energy cost, energy as in power, petrol, diesel. 

The minimum wage was just approved a few months ago. Those also build into the cost of business, increased cost of funds and interest rates are going up. Those are the key areas that we have battled with in the last few years and we are hope that the New Year will bring some level of relief.

Oppositon to the tax reform bills

We think there is quite a lot of misinformation about the bill. Many people have not really taken the time to study the bill to get to the core of the bill. There has been so much misinformation and disinformation concerning the bill. Everybody is just cannibalising the bill from the perspective of their interests. This is quite unfortunate. 

On the private sector level, we were part of the presidential committee, through our representative, we participated actively in the work of the committee. Even the chairman of the committee has said rightly that the bill is not perfect, but there are opportunities for amendment. We think the direction that the committee has taken to continue to engage, to continue to inform is the right direction. I just hope that national interest will prevail in the long run for us to move forward.

Issue of lack of consultation

The issue of non-consultation is far from the truth. We knew the level of consultation that was made, both online and physical consultation. The committee moved round. We knew the work that was done within the context of engagement. It will be far from the truth for anybody to say there was no consultation. The reality of the bill jolted everybody back from their lethargy. And when they woke up from their slumber, they saw that this bill was going to happen. 

It is one thing for the committee to want to discuss with you and it is another thing for you as the Chief Executive Officer to send an officer that could not take decisions or adequately distill the bill to do a report that the CEO will work with. That is a different thing. But to say consultations were not done, that is far from the truth.

Contention about VAT 

It is still misinformation. Misinformation and our lack of capacity or lack of interest in reading. People wait for people to read and interpret for them. Even with the explanation that was given on Channels TV, the Channel’s live programme for almost two to three hours, where the committee took Nigerians through each of the analyses of those issues. The fear that some people will be advantaged more than others in the context of the VAT has been dispelled by the analysis that was done. For us, it is just for people to listen to understand, rather than listening to respond. Significantly, that is what has been happening.

People just pick an item and then start making issues out of it without looking at the whole issue in the whole context that should be looked at. We believe sufficient, and adequate information has been given. We know the consultation is still going on. 

Some people say the VAT bill also negates the inheritance law in some areas. That has also been dispelled. I think it is just for this country to decide whether they want to move forward or want to continue in the path that brought us to where we are currently. It is a choice that we all have to make.

Political inducement 

We look at it from the context of the benefits to organised businesses, and the benefits to the country as a whole. While politicians will always be politicians, we are business people and we look at it from the context of business.

Benefits of bill

It reduces some burden on the average Nigerian. It reduces some burden on some level of workers that are not earning to a certain level. It puts more money in the hands of Nigerians and the more money that it puts in the hands of Nigerians, the bigger their capacity to purchase. It also expands the scope in such a way that it reduces collection rates significantly. It creates buffers for the organised private sector . 

We have some issues that we have raised concerning the bill, but significantly it addresses those critical issues that we all currently faced . One of the biggest things that it will achieve for us is being able to block leakages and have a focused context of collection. Take for example, the Customs Service is today collecting revenue. What is the business of customs collecting revenue? Its work is to do the evaluation, to evaluate the import duty. Naturally you expect those that will be impacted, organisations, individuals, whose stock in trade has been to benefit from what has not been working for all of us to just sit down, fold their hands and see the source of their livelihood taken from them. If  this country wants to move forward, we just need to make some very difficult decisions. If not, we will find ourselves crying about the effects, and are feeding the cause..

Addressing business concerns

Multiple taxation is something that has been with us for a long time. Even as we speak, the House of Assembly, the Committee on Corporate Social Responsibility, is also coming up with another law to regulate corporate social responsibility. This also puts in additional burden on organisations. But this reform bill seems to bring everything into context.

If you are not a revenue-generating agency, you should not generate revenue. Let the new Federal Inland Revenue Service, FIRS, that is the revenue collection agency for the country, let it do the work, let it be empowered in such a way that it can effectively and efficiently collect all these taxes.

Updating labour laws

Well, the new Minister of Labour and Employment is committed to it. The minister said he is following up with the Minister of Justice to receive the copy of the bill that has been sent to the ministry. Because after it leaves the FEC, the Minister of Justice will have to take a look at the bill and contextualise it in a bill form. That is where the bill is. I was just hoping that the minister will do all that is necessary to get the bill to the National Assembly so that a proper public hearing

 can be held.